Price of cigarettes to rise above £14 as tobacco tax hiked by nearly 15%

15 March 2023 , 13:12

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The Chancellor made the announcement in his Spring Budget today (Image: Getty Images/Picture Press RM)

Smokers will pay more for cigarettes after Chancellor Jeremy Hunt announced an almost 15% rise in tobacco duty.

The cigarette levy is to rose by 12.7% in line with the Retail Price Index (RPI) plus an extra 2% on top of this.

The rate of hand-rolling tobacco increased by the RPI figure plus 6%.

The increases came into force from 6pm on Wednesday, March 15.

The amount of duty paid on cigarettes usually increases with inflation each year and the increase seen in the Budget today was expected by many in the industry.

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The ONS says the average pack of 20 cigarettes costs £12.84, so the increase will see £1.89 added to the price and means it is going up to £14.73.

Sarah Coles, head of personal finance at Hargreaves Lansdown, said: "For smokers... the pain will be immediate.

"The duty on cigarettes will rise by RPI plus 2%, which is almost 15%."

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Campaigners have accused the Chancellor of being "heartless and cruel" after Jeremy Hunt pledged to uprate tobacco duty.

Simon Clark, director of the smokers' group Forest, said: "Punishing smokers for their habit during a cost of living crisis is heartless and cruel.

"This is bad news for legitimate, law-abiding retailers, and bad news for the Treasury which could lose billions of pounds in revenue if more smokers buy their tobacco from illicit traders."

Taxing tobacco is a big revenue raiser for the UK Government.

In 2022, the Government collected around £10.7billion, which was 1.2% of the total tax taken.

Smokers are used to seeing costs go up each year, however the last time cigarette prices were increased was in October 2021 when 88p was added to the most expensive pack increasing it from £12.73 to just over £13.60.

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There are currently 6.6million people who have the habit in the UK.

The Government is hoping that frequent price rises will lead to less than 5% of the population being smokers by 2030, which will then class the UK as being "smoke free".

Ruby Flanagan